Environment Protection Authority v Grafil Pty Ltd; Environment Protection Authority v Mackenzie

Chronology

1. On 28 June 2018 the Court published Grafil No 1. No final orders acquitting the Defendants were made to provide the EPA an opportunity to consider whether it wished to state a case to the Court of Criminal Appeal pursuant to s 5AE of the CA Act. On that day the EPA agreed to use its best endeavours to provide any draft stated case to the Defendants and the Court on or before 23 July 2018. The matter was listed for 26 July 2018.
2. On the morning of 26 July 2018 the EPA provided the Defendants with the first draft stated case (marked MFI 1). At the mention on the afternoon of 26 July 2018 the EPA provided the Court with MFI 1. Some discussion occurred with concern expressed by the Defendants that some 150 questions were posed. The EPA submitted there were about 70. I expressed a preference for less questions focussing on key issues. The Court directed the Defendants to provide a response to the draft stated case by 10 August 2018 and the EPA to provide its final proposed stated case to the Court and the Defendants by 21 August 2018. The matter was listed on 24 August 2018.
3. On 10 August 2018 the Court received by email the Defendants' response to the first draft stated case (MFI 3). The Defendants submitted that they should be acquitted and the stated case rejected as the stated case was impermissibly drafted as if it was an appeal and impermissibly sought to challenge every finding of fact and amounted to an abuse of process. On 21 August 2018 the EPA filed a second draft stated case (MFI 2) including a folder of annexures which contained extensive evidence relied on at the trial, and a submission in reply to the Defendants' response to the first draft stated case (MFI 4).
4. On 24 August the matter came before the Court. After discussion I directed the EPA to provide a further draft of the stated case to the Court and the Defendants by 3 September 2018. I indicated the draft would require extensive revision before it would be acceptable. The matter was listed on 6 September 2018.
5. On 3 September 2018 the EPA filed a third draft stated case (MFI 5). On 5 September 2018 at 4.41 pm the Court received by email written submissions on behalf of the Defendants in response to the EPA's third draft stated case and an addendum to those submissions at 9.42 pm on 5 September 2018 (MFI 6).
6. On 6 September 2018 the matter came before the Court. The Defendants tendered two letters dated 23 August 2018 and 5 September 2018 sent by the Defendants' solicitor to the EPA identifying legal costs incurred in relation to the mentions on 26 July 2018 and 24 August 2018 (MFI 7). The Defendants applied to have MFI 1 and MFI 2 rejected and the Defendants acquitted. I did not accept the Defendants' submission that they should be acquitted and the stated case rejected in my ruling on 6 September 2018.
7. On 4 December 2018 the matter came before the Court for a further mention directed to finalising the stated case. The fourth draft filed on 21 November 2018 became MFI 9. It identifies 17 questions of law according to the Prosecutor. Some of these are agreed. The Defendants continue to dispute that some are questions of law. Additional documents were identified relating to the exchange of various submissions by the parties concerning the terms of the stated case and were marked MFI 8, MFI 10, MFI 11 and MFI 12.

Submissions

1. The Defendants submitted that there has been unreasonable conduct and unreasonable delay by the EPA in progressing the stated case. The correspondence referred to in [10] above identified costs of $4,930.95 incurred by the Defendants as a result of the mention on 26 July 2018 and $4,146.45 incurred by the Defendants as a result of the mention on 24 August 2018. The Defendants submitted that "additional" within the meaning of s 257F(2) meant costs that were incurred as what was expected to be achieved was not achieved. The court appearances on 26 July 2018, 24 August 2018 and 4 December 2018 were additional as the inappropriate nature of the first three draft stated cases meant the aim of achieving a final stated case was not achieved. The EPA should have been prepared to state a final case on 26 July 2018.
2. The EPA opposes a costs order being made. It accepts that the Court has power to make the costs order but submits the requirements of s 257F(2) have not been satisfied as no additional costs have been incurred as a result of unreasonable conduct or unreasonable delay by it. It relied on Environment Protection Authority v Riverina (Australia) Pty Ltd (No 2) [2014] NSWLEC 191 (Riverina) at [36] to submit that both the conduct and delay must be unreasonable for a costs order to be made and neither applied in this case. It further relied on Council of the City of Sydney v Trico Constructions Pty Ltd [2015] NSWLEC 56 (Trico) at [131]-[134].
3. The EPA submitted that the matter on 26 July 2018 would have been adjourned in any event and was not a result of the EPA breaching a court order. As the Defendants were likely to appear in court on that occasion in any event, the costs incurred could not be characterised as "additional". The Defendants' solicitors could have appointed an agent so as not to incur travel expenses. The two day lapse in "best endeavours" to produce a stated case agreed on 28 June 2018 was not sufficient to be unreasonable conduct or delay. Further, it is common for the preparation of a stated case to require several mentions in order for it to be finalised.

Finding

1. The power in s 257F is a general power enabling a court to order costs where specified by the section in a criminal matter arising under Pt 5 of the CP Act. Part 5 concerns summary proceedings in the Supreme Court and other higher courts. I am considering the application of the section in the context of a stated case application by a prosecutor under s 5AE of the CA Act.
2. In Trico the Council submitted at [130] that "… unless the costs incurred are found to fall within the term 'additional costs', they cannot be the subject of an order for costs under s 257F(1)". Preston CJ agreed holding at [132] firstly that the matter must be adjourned, secondly that the other party must incur "additional costs" and thirdly that the Court must be satisfied that the additional costs were incurred because of unreasonable conduct or delays.
3. Pepper J observed to similar effect at [29] in Riverina. Her Honour was considering a costs application in the context of the granting of a stay of proceedings pending the determination of a stated case which resulted in an adjournment.
4. There is no timeframe for the filing of a stated case under s 5AE of the CA Act from a decision of the Land and Environment Court unlike the 28 day limit in s 5B in relation to the District Court or the 28 day limit in s 5BA in relation to appeals to the Land and Environment Court in its environmental offences appeals jurisdiction.
5. The finding on the principal charge against Grafil the subject of the draft stated case was complex. The lengthy judgment in Grafil No 1 followed a four week trial. But for a prosecutor's statutory right to state a case under s 5AE a defendant found not guilty would be acquitted without any need to incur additional legal costs. The charges in this matter were serious and also had potentially serious financial implications for the Defendants as I observed in Grafil No 1 at [370] arising from the presence of asbestos in material deposited on Grafil's land.
6. While a prosecutor generally drafts a stated case for consideration by the trial judge, input from a defendant's legal team is generally very useful in finalising a stated case. That input is likely to require legal costs to be incurred given that a stated case must identify questions of law.
7. My limited experience of preparing a stated case is that a number of court mentions to draft appropriate questions of law can be essential to finalising an appropriate set of questions, as has occurred in this case. That this occurs as a practical matter does not overcome the disadvantage to a defendant in such a process in incurring further legal costs. The chronology set out above includes the production of four versions of a draft stated case which I note has changed substantially over time. There have been three adjournments necessitated by the state of the drafts in MFI 1, MFI 2 and MFI 5. All drafts have required lengthy discussions in court and generated a substantial amount of correspondence and submissions by the parties. That the Defendants did not choose to make detailed submissions on MFI 1 and MFI 2, an appropriate course of action in terms of not incurring unnecessary costs, does not undermine their costs application. I am satisfied that the Defendants have incurred additional costs as a result of these adjournments. That part of s 257F is satisfied. The issue that arises for determination is whether these adjournments giving rise to additional costs arose as a result of unreasonable behaviour or unreasonable delay (see Riverina at [36]) of the Prosecutor.
8. The Defendants submit that the Prosecutor should have got the stated case right the first time in the version provided on 26 July 2018. Whether it is unreasonable behaviour for a prosecutor not to provide satisfactory terms of a draft stated case the first time need not be determined in this matter as a general finding. Considering the particular circumstances before me, the first two drafts of the stated case (MFI 1 and MFI 2) fell well short of being in an acceptable form in my view. MFI 1 was very lengthy containing some 70 questions according to the Prosecutor and 150 according to the Defendants. Evidence from the trial should not generally be included in a stated case but was extensively included in MFI 2. The draft stated cases in MFI 1 and later in MFI 2 were quite different from each other, unreasonably lengthy and not in an appropriate form. A third version of the draft stated case (MFI 5) continued to be roundly criticised by the Defendants as not identifying appropriate questions of law. The Prosecutor prepared a further version which became MFI 9. These observations inform my consideration of whether there has been unreasonable delay and/or unreasonable conduct of the EPA justifying an order under s 257F.
9. The adjournments occasioned by the inappropriate draft stated cases provided in MFI 1, MFI 2 and MFI 5 do arise from unreasonable behaviour and/or unreasonable delay by the Prosecutor. The provision of MFI 1 and MFI 2 was unreasonable. While I did not accede to the Defendants' application that I dismiss the stated case and acquit them on 6 September 2018 as I did not consider the Prosecutor's behaviour amounted to an abuse of process, I agree with the Defendants that MFI 1 and MFI 2 were completely unsuitable drafts of a stated case. To the extent that no final stated case was able to be agreed on 26 July 2018 resulting in three adjournments there has been unreasonable delay.
10. I do not accept the Prosecutor's submissions concerning additional costs not arising from the mention on 26 July 2018 on the basis the Defendants would have had to appear and the matter would have to be adjourned anyway. Had a stated case in close to final form been provided on 26 July 2018 such a submission may have been available but that is not what occurred. Nor should the Defendants' costs be limited on the basis that an agent could have been appointed to save on solicitor's costs. This matter was complex and it was reasonable for the Defendants to have their complete legal team present given the importance for the Defendants of having an appropriate stated case. That the EPA provided the draft stated case on the morning of 26 July 2018 rather than two days earlier as it had said it would use its best endeavours to achieve contributes to my finding of unreasonable behaviour on that day. That there was no breach of an order because I did not choose to make one is not material.
11. The Defendants also seek additional costs occasioned by the latest mention on 4 December 2018 when the fourth version of the draft stated case which became MFI 9 was provided to the Court. While there is still substantial disagreement between the parties in relation to 11 out of 17 questions identified by the Prosecutor, this version is much closer to being in an acceptable form when compared to MFI 1, MFI 2 and MFI 5. Had this version been available on 26 July 2018 the Defendants would have had much less to complain about.
12. I consider the Defendants should have a costs order in their favour in relation to the mentions on 26 July 2018, 24 August 2018 and 4 December 2018 pursuant to s 257F of the CP Act.

Order

1. The Court orders as follows: 1. The Prosecutor is to pay the Defendants' costs of the mentions on 26 July 2018, 24 August 2018 and 4 December 2018 pursuant to s 257F of the Criminal Procedure Act 1986.

Amendments 11 February 2019 - Paragraph 1, line 4 - change from Environmental Planning and Assessment Act 1979 to Protection of the Environment Operations Act 1997 pursuant to section 36.17 of the Uniform Civil Procedure Rules ("slip rule"). 14 February 2019 - Typographical - cover page - omitted hearing dates 15 February 2019 - Typographical - cover page - omitted to delete EPA Act 1979 when replacing with the POEO Act on the cover page in the amendment of 11 February 2019. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 15 February 2019